Thursday, June 24, 2010
Health Care “Grandfathering” Rules Issued
Employers should carefully weigh any changes to their health insurance plans that could trigger the early application of new federal health care mandates on their policies. Existing employer health insurance plans are not required to adopt certain aspects of the new law until 2014 (e.g. prohibition of co-pays for preventive services, coverage of adult dependents to age 26 that have other job-based coverage) unless they make plan changes that cause a loss of “grandfathered” status.” Interim final regulations issued last week by federal agencies detail the types of changes that will cause a loss of grandfathered status, including:
- Significantly cutting or reducing benefits;
- Changing insurers;
- Raising co-pays by more than $5 or the rate of medical inflation plus 15%; or
- Raising deductibles by more than the rate of medical inflation plus 15%.
Federal officials estimate that most employer health plans will lose grandfathered status prior to 2014 due to such changes. See a summary of the grandfathering regulations from Seyfarth Shaw. Contact Ron Wineholt for further information at .(JavaScript must be enabled to view this email address).
